Help On Student Loans

8 min read

How do I get student loan forgiveness?

Student loan forgiveness programs vary by lender, but they generally fall into four categories: income-based repayment (IBR), pay-as-you-earn (PAYE), interest only payment (IOP), and direct consolidation. Each program provides different terms of loan relief; some may require that you make payments for 10 years after graduating while others offer full debt relief immediately. You’ll need to provide proof of enrollment and graduation dates. Your servicer should have details about each option’s eligibility requirements. If you don’t qualify for any of these options, ask your servicer if you can consolidate your loans — that way, you could potentially avoid making payments altogether.

What is a private student loan?

Private student loans are not guaranteed by the government, so lenders aren’t obligated to forgive your debt. But even if you default on a private student loan, you’re unlikely to lose your home or car. And unlike federal loans, private loans often have lower interest rates. Private lending comes with its own set of risks, though. Lenders might not give you enough time to repay your loan, refuse to negotiate on your interest rate, or charge exorbitant fees. So be sure to shop around for a lender before signing anything.

Can I refinance my student loans?

Yes! Refinancing helps keep your monthly payments low. Just remember to factor in how much extra you’d save by refinancing both your interest rate and your principal amount. 4. Do I have to take out a private student loan? Is refinancing a good idea?

You don’t necessarily have to sign for a private student loan. In fact, many people who borrow money from family members choose public loans over private ones because they’re cheaper. Plus, the federal government makes private student loans eligible for discharge under bankruptcy law. Refinancing, however, does allow you to reduce your balance faster. Once your current term expires, you’ll likely face higher interest rates on future loans. That said, refinancing your private student loan can still save you hundreds of dollars per month.

My credit score isn’t great – can I still get a student loan?

No matter what kind of credit history you have, you can always apply for a student loan. However, getting approved for a federal loan requires having perfect or near-perfect credit. State-run programs are less stringent, but they usually require you to maintain satisfactory grades and scores on standardized tests.

Is it true that college graduates are financially screwed?

While a college degree definitely opens doors, it doesn’t automatically guarantee you a job. Many recent grads struggle to find careers that use their degrees, so they wind up having to work long hours for below-market wages. Still worse, many graduates end up saddled with substantial amounts of student loan debt. According to a study from the New York Federal Reserve Bank, nearly 60% of borrowers now graduate with $33,000 or more in debt.

Should I file for bankruptcy?

Bankruptcy laws exist for a reason: They help people get back on their feet after losing everything. If you’ve lost your job or your house, filing for Chapter 13 bankruptcy can protect your assets so that you can continue paying off debts. Depending on your situation, you may be able to wipe away as much as $137,500 worth of debt. Unfortunately, bankruptcy isn’t right for everyone. Don’t try to game the system just to eliminate your debt load. Instead, focus on rebuilding your financial health.

Help On Student Loans

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Help On Student Loans

How To Avoid Paying Off Your Student Loans Early

First of all, student loans shouldn’t even exist. However, if they do, here’s how to avoid paying them off early. Many people don’t realize this, but they can actually put their payments toward their loan balance instead of paying interest to the banks. Here’s what you need to know about that.

What Is the Average Loan Balance?

The average student loan balance nationwide is $26,600. That’s a shocking number considering students graduate with tens of thousands of dollars in debt. The good news is that the average student loan balance is actually dropping.

When Are You Likely to Pay Back Your Loans?

If you’re borrowing between $10,000 and $15,000, you have a decent chance of repaying your loans in 10 years. If you borrowed over $35,000, however, you’ll only pay back your loans after 15 years, on average.

Can Student Loans Be Refinanced?

You might want to consider refinancing your student loans since they carry a lot of fees. There’s no way around it, though; unless you refinance, you will eventually owe your bank money.

Should I Take Out More than One Loan?

Depending on the type of student loan you have, you may not be able to take out more than one at once. Federal Stafford loans allow borrowers to take out two, while PLUS loans limit borrowers to taking out just one.

Am I Liable to Repay My Student Loans?

Yes, absolutely. Even if you’re having trouble making payments now, you still have to repay your loan. All lenders offer forbearance, deferment and forgiveness programs, but they aren’t always effective.

Can Student Loans Be Consolidated?

Consolidating your loans doesn’t make sense if you can’t afford to make the minimum payment each month. In fact, consolidating your student loans could make matters worse because you’d likely end up owing more money to the lender and accrue more interest.

Help On Student Loans

What Are Federal Direct Loans?

Federal direct loans allow students to borrow money directly from the government to pay for college tuition. These loans have low interest rates and long repayment terms, and they also don’t require borrowers to make monthly payments. They are not secured debts, meaning if borrowers default on their loan obligations, the federal government does not seize assets or garnish wages to recover any unpaid balance.

How Do I Get Started?

To get started, first, you need to determine what type of student loan you want to apply for. There are two types of student loans: subsidized and unsubsidized. Subsidized loans are offered by private lenders and offer lower rates than unsubsidized loans (the rates on these loans start at about 2% while the rates on unsubsidized loans begin at around 6%). If you choose a subsidized loan, you’ll need to go to your financial aid office to fill out a Free Application for Federal Student Aid (FAFSA). You’ll also need to complete a FAFSA to receive unsubsidized loans. Once you’ve filled out your FAFSA, your school’s financial aid officer will review your information and tell you whether or not you qualify for federal student loans. If you do qualify, he/she will provide you with the application for federal student loans and send it to the U.S. Department of Education.

What Is A Good Loan Term?

You may want to consider choosing a loan term longer than the standard 10 years if you plan to graduate within 3-5 years. Since interest rates rise over time, you could potentially end up paying higher interest costs if you take out a short-term loan and then decide to work for less than three years after graduation. Also note that the amount of debt you incur might increase if you extend your loan term.

Amortization Schedule & Repayment Terms

The amortization schedule determines how much each month’s payment is going towards principal and how much is being paid toward interest. An example of a 5-year loan with a $4,000 annual payment would look something like this:

Principal $400 each month x 12 months

Interest $40 each month x 12 months $480 per year

Payments $400 – $480 -$80 each month

Once your monthly payments reach $0, the remaining balance of the loan will be considered completely paid off. However, even though the entire balance was repaid, there is still some interest that accrued during the entire period. This means you must start making payments again once you stop repaying the loan entirely. Most people who use student loans find it easier and more convenient to divide the loan into smaller installments instead of taking out one big payment.

Repayment terms refer to how many years it takes before you owe the full amount of your loan back. When picking a repayment term, think about how long you plan to stay in school. If you’re planning on graduating in four years, for instance, you might choose to repay your loan over five years rather than four. The longer your repayment term, the lower your monthly payments will be. However, the larger your monthly payment, the greater the chance that you’ll fall behind on your loan.

Can I Refinance My Student Loan?

Help On Student Loans

How To Apply For Federal Student Aid

Step 1 – Go online and look at your FAFSA (Free Application for Federal Student Aid). You want to fill out the FAFSA before you apply for federal student aid. Once you have completed the FAFSA, you need to upload it to your MyStudentAid account. If you do not have access to your tax return file through MyStudentAid, get one to complete your FAFSA. Remember, if your parents did not live together while they were married, you should still claim them as dependents even though you may not be related. Also, make sure you check the box “Other Income” on the front of your tax return and list your income.

What is Your Expected Family Contribution?

For each year you are enrolled in college, you will have an expected family contribution amount. Find this number on your financial aid award letter. The expected family contribution is the total cost of attendance minus any grants or scholarships you receive. Make sure you know what each item costs and how much you are paying in tuition, room, board, books, transportation, fees, etc.

Step 2 – Now the fun begins! Contact your school’s financial aid office to request information about financing your education. There is no set deadline for applying for loans. However, some schools require applications to be submitted two weeks prior to registration. Check to find out what their deadlines are.

Step 3 – When you’re ready, head to www.finaid.org to submit your application. If you have already applied for loans, you can log back into your MyStudentAid account and click the button “Apply for New Loans.”

What Types Of Loans Are Available?

There are several types of loans available to help pay for your education. Most students use private loans first. Private loans are considered unsecured loans meaning there is little to no risk involved. Examples of private loans include Stafford, PLUS, Perkins, and GradPLUS. These loans have low interest rates and flexible repayment options. Then, you might consider federal loans. Federal loans are considered secured loans. Secured means you put up collateral for the loan. Examples of federal loans include the Direct Subsidized Loan, the Direct Unsubsidized Loan, the Parent Plus Loan Program, and the Graduate Work-Study program. All of these loans allow you to borrow money without putting up any collateral. Finally, you could also try getting some outside funding. Outside funding includes scholarships, fellowships, government programs, and employer-based plans.

How Do I Know Which Type Of Loan Is Right For Me?

The type of loan you choose will depend on what you plan on majoring in, your financial situation, and what you want to accomplish with your education. For example, if you want to go into business, you would probably want to take out a private loan rather than a federal loan since you don’t need any collateral for the loan. As long as you understand the differences between these different types of loans, you should be able to determine which one is right for you.

How Much Should I Borrow?

You can borrow only a certain amount of money per semester from federal loans. The maximum borrowing limits vary depending on your age and household size. Interest rates start at 4% for subsidized loans and 8% for unsubsidized loans. So, the earlier you apply for loans, the less expensive they will be.

Can I Get A Refund From My Loans After Graduation?

Yes! In fact, you’ll often get a refund from your loans after graduation if you graduated with honors and received a degree. But, there are exceptions. The exact rules change from institution to institution.

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